Bluerock High Income Institutional Credit Fund Lowers Both Base Management and Incentive Fees
By Staff
Bluerock High Income Institutional Credit Fund, an income-focused interval fund with a portfolio comprised of pools of diversified collateralized loan obligations, announced recent changes to its fee structure.
Effective Jan. 1, 2025, the fund has reduced its base management fee from an annual rate of 1.75% to 1.25% of the average value of the fund’s daily net assets. The base management fee is calculated and payable monthly in arrears.
Similarly, effective Jan. 1, 2025, the fund’s incentive fee has been reduced from 20% of the fund’s “pre-incentive fee net investment income” subject to an annual 8% annual hurdle rate to 12.5% and subject to an annual 7.5% annual hurdle rate. The incentive fee is calculated and payable quarterly in arrears. According to Bluerock, no incentive fee will be payable in any calendar quarter in which the fund’s performance does not exceed the hurdle rate of 1.875% per quarter, or an annualized rate of 7.5%.
Additionally, the fund and Bluerock have entered into an expense limitation and reimbursement agreement. Under this agreement, Bluerock will waive base management fees and/or reimburse the fund for ordinary operating expenses to ensure that the fund’s total annual operating expenses, excluding incentive fees, taxes, interest, brokerage commissions and extraordinary expenses, do not exceed 1.25% per annum of the fund’s average daily net assets attributable to Class F shares. The fund stated that this agreement will remain in effect until at least Jan. 31, 2026, unless the fund’s board approves its modification or termination. The agreement may be renewed at the board’s discretion.
The fund, which raised its distribution rate to 11% in late 2023, regularly paid quarterly distributions at a rate of 14.4% throughout 2024. This distribution rate was comprised of the fund’s regular 11% annual distribution rate plus a supplemental distribution of 3.4% annualized. Net assets under management for the fund were approximately $161 million as of Sept. 30.
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